WANDILE SIHLOBO, ECONOMIST, INDUSTRY SERVICES, GRAIN SA
There have been several debates about the current situation of the South African groundnut industry, as well as its sustainability.
Over the years, the South African groundnut industry has shown a significant decline in the area under production, hence a decline on exports (Grain SA, 2013). There are a number of factors that have contributed to this decline in production area and crop productivity, but the most noted ones are climatic conditions, labour issues and the issues of cultivars that are used by the South African groundnut producers.
Meyer and Van der Burgh (2012) noted that there is a need for improved cultivars to enhance the producers of South African groundnuts. A noted example of the positive impact of change in cultivars is that of Argentina which resulted to an increase in productivity.
Furthermore because of the outlined low production, climatic factors and issues of cultivars, the South African groundnuts industry has been left behind by some of the major groundnut exporters that are using improved cultivars such as the USA, China and Argentina (Meyer and Van der Burgh, 2012).
However, there is still a significant potential for the South African groundnut industry to increase the exports market share in its existing markets and to infiltrate new markets. But for these markets to realise, one needs permanent or consistent stocks available for exports. This article focusses on outlining the potential export markets for the South African groundnut industry.
Graph 1 depicts the trend of the South African exports and imports in the world market for the past twelve years. Over these years, there has been high volatility on both South African groundnut imports and exports, with 2001 and 2002 noted as years with large quantities of groundnut exports to the world market.
In 2012 the situation seemed to have changed as there were more imports from the world markets than exports. However, historical data shows that South African groundnuts have the potential to increase export quantities (ITC, 2013).
Graph 2 indicates Brazilian, Russian, Indian, Chinese and South African (BRICS) groundnut imports from the world markets for the past twelve years.
Over the period of twelve years, Russia is observed to be the major groundnut importer from the world market. From 2006, China has also been showing an increasing trend of groundnut imports from the world market. Among all the BRICS countries, Brazil and India are viewed to be the countries importing the least from the world market.
Graph 3 shows the top ten world groundnut markets: The Netherlands is the top groundnut importer, followed by Vietnam, Indonesia, Germany and Russia as the top five importers.
Over the period of five years, the Netherlands have been showing volatility on the quantity imported from the world market. Vietnam only showed significant import quantities in 2012, while for the past five years, Indonesia has been showing a positive increasing trend of groundnut imports from world markets, except in 2012 when there was a slight decline.
In 2012, the Netherlands, Vietnam, Indonesia, Germany, Russia, the United Kingdom, Canada, Thailand, the Philippines and Mexico showed import quantities of about 292 415 tons, 283 455 tons, 185 828 tons, 102 041 tons, 86 115 tons, 85 568 tons, 73 260 tons, 64 905 tons, 56 045 tons and 49 580 tons, respectively.
The data shows an increase in South African groundnut exports, which shows that there is a potential to increase the production and reach new markets. However, there is still a strong need for research on the cultivars that would enhance the production, given the climatic conditions.
An increasing consumption of groundnuts is also shown by the BRICS countries, specifically Russia and China. This is an opportunity for the South African groundnut industry due to the existing trading relationship with these countries.
The world market also shows a positive increasing trend in groundnut imports, thus an opportunity for the South African groundnut industry to get a closer understanding of these markets in order to create a market share for exports.
Grain SA, 2013. RSA Groundnuts: Area planted, production and yields, Pretoria: Grain SA. ITC, 2013. Trade Map: Trade statistics for the international development. [Online] Available at: www.trademap.org [Accessed 19/05/2013].
Meyer, F. and Van der Burgh, G. 2012. Evaluating the sustainability of South African groundnut industry, Pretoria: Bureau of Food and Agricultural Policy.